ptsb's cost of funds is 0.55%

Brendan Burgess

Brendan Burgess

Founder
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52,045
I attended ptsb's AGM today and asked them
1) The cost of funds
2) The managed variable rate for an LTV <90%
3) The managed variable rate fora n LTV <80%

The cost of funds is 0.55%

The 90% LTV rate is 4.3% and the 80% LTV rate is 4.1%

I tried to hammer home how this fleecing of customers is bad for business and their reputation.

But I don't think that they understood it.

Brendan
 
The margin between PTSB's cost of funds and their mortgage rates is certainly shocking.

Still, I suppose somebody has to make up for the fact that 27% of the mortgages sitting on PTSB's books are currently impaired. :(
 
Well done Brendan for extracting their cost of funds.Hard to understand why BOI cost of funds is higher at .70%

It just shows the massive rip off we have to endure.
 
Clonback said:
Well done Brendan for extracting their cost of funds.Hard to understand why BOI cost of funds is higher at .70%

It just shows the massive rip off we have to endure.
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To be fair, they are quite open about their cost of funds in their investor presentations.

Could you point me to where you are seeing BoI's cost of funds at 70bps? I know it was 80bps in H2 2015 and I'm sure it fell further in Q1 2016.

These figures are normally given as an average over a particular reporting period so you need to be careful that you are comparing like with like.
 
Sarenco

I get a BOI statement every quarter which shows their cost of funds as my loan is COF + margin
 
Clonback said:
Sarenco

I get a BOI statement every quarter which shows their cost of funds as my loan is COF + margin
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Ah, thanks. Do you know what period that figure relates to? I would guess it's their average cost of funds during Q4 2015.
 
In that case I'm at a complete loss as to how PTSB's cost of funds could now be 15bps lower than BoI's equivalent figure. It was certainly higher in H2 2015 so that's a pretty dramatic turnaround over one quarter.
 
Also with BOI cost of funds .70bps hard to understand how PTSB are able to borrow at a much lower rate.
 
Would this low cost of funds now mean that the infamous trackers are not as big an issue (loss making) for the banks now
 
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Sarenco said:
In that case I'm at a complete loss as to how PTSB's cost of funds could now be 15bps lower than BoI's equivalent figure. It was certainly higher in H2 2015 so that's a pretty dramatic turnaround over one quarter.
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Hi Sarenco

Two points

I asked what was the current cost of funding. They went through their files and came back with the clear answer "55 basis points". Later when I probed it, they said that the full cost was a bit higher and that 55 basis points was the core cost of funds.

I think that the lower cost might be to do with the fact that ptsb still relies a bit on ECB funding while BoI has probably got rid of theirs completely.

Brendan
 
They know their cost of funds all right as Ger said above but they'd prefer if Brendan wasn't at the agm so they wouldn't have to mention it at all so well done Brendan. You're hearing must be top notch cause I'm sure they said 55 BP in as low a voice as possible. Just re-iterates the exert of the scandalous treatment were subject to because nobody gives a damn
 
tonymac said:
They know their cost of funds all right as Ger said above but they'd prefer if Brendan wasn't at the agm so they wouldn't have to mention it at all so well done Brendan. You're hearing must be top notch cause I'm sure they said 55 BP in as low a voice as possible. Just re-iterates the exert of the scandalous treatment were subject to because nobody gives a damn
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But they publish details of their cost of funds on the investor relations section of their website. They have no reason to be secretive about their COF/NIM - it's actually a good news story from a shareholder perspective.
 
Cervelo said:
Would this low cost of funds now mean that the infamous trackers are not as big an issue (loss making) for the banks now
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The average tracker rate on PTSB's books is 1.11% - that's double their cost of funds.

There is no doubt that borrowers that are actually paying their mortgages are getting royally ripped off. On the other hand, home loan borrowers in default are getting a fantastic deal.
 
tonymac said:
You're hearing must be top notch cause I'm sure they said 55 BP in as low a voice as possible.
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Hi Tony

That's interesting. There were three old codgers sitting directly in front of me chatting. So I found it very hard to hear. I thought he said fifty five but I wasn't sure. I asked him to repeat it and I still wasn't sure. Then he said it a third time.

I was only sure when I read it in the Irish Times later.

As it happens, I think I will feign deafness the next time so that they have to repeat such scandalous figures three times.

Brendan
 
Sarenco said:
But they publish details of their cost of funds on the investor relations section of their website. They have no reason to be secretive about their COF/NIM - it's actually a good news story from a shareholder perspective.
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Fair enough, it just emphasises the extent of the rip off so as everyone is happy, the shareholders, the bank, the regulatory authorities as the banks are coming back to profitability. All except the ordinary person who gets the raw deal as usual. Not a nice feeling to be the gillie in all this is it but then again if the vast majority of people are happy with that feeling there's not a whole lot a small few of us on this site will be able to do about it.
 
tonymac said:
All except the ordinary person who gets the raw deal as usual.
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Well, the State still owns 75% of PTSB so the ordinary person (i.e. every Irish citizen) has a real interest in PTSB's profitability.

The main reason that rates are so high is the extraordinary level of loan defaults - 27% of PTSB mortgages are impaired. The next time you hear a politician talking about keeping people in their homes, remember who's paying for it.

Defaulting borrowers certainly aren't getting a raw deal.
 
Sarenco said:
Defaulting borrowers certainly aren't getting a raw deal.
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Which is about right since deliquent lenders, politicians, central bankers and regulators received no sanction and were more to blame for the property bubble than the borrowers.
 
Sarenco said:
Well, the State still owns 75% of PTSB so the ordinary person (i.e. every Irish citizen) has a real interest in PTSB's profitability.

The main reason that rates are so high is the extraordinary level of loan defaults - 27% of PTSB mortgages are impaired. The next time you hear a politician talking about keeping people in their homes, remember who's paying for it.

Defaulting borrowers certainly aren't getting a raw deal.
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Agree totally with you on that Sarenco, the thing is the bank we own is also screwing us, BIG TIME, and we're also paying for the poor default regime in this country. Sounds like a loss making business doesn't it, ploughing money in but getting nothing back. Ok were getting the deeds of our properties but what an extra price were paying.
 
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